Lamb Weston enters the last week of May with a striking disconnect between insider conviction and a stock that refuses to cooperate.
The most compelling story on LW right now is what insiders are doing with their own money. Jana Partners — the activist fund holding a board seat — spent over $16 million buying shares between April 7 and April 15, accumulating 386,000 shares at prices between $40.89 and $43.19. The CFO, James Derek Gray, then followed in May, purchasing 10,000 shares across two tranches on May 11 at roughly $40.90. A board director also stepped in at $39.45 in early April. Net insider buying over 90 days tops $17.2 million. This is not a single executive exercising loyalty — it's a coordinated cluster of buys from multiple levels of the company, all at current market prices, all in the low-to-mid $40s. That's a deliberate signal.
The problem is the stock keeps sliding. LW closed Tuesday at $42.12, down nearly 4% on the day and off 5% over the past month. Jana and the CFO are sitting on underwater positions from their May buys. The stock broke below the $40.90 level Gray paid just two weeks ago. The next scheduled earnings call is July 23, which gives the thesis roughly eight weeks to develop.
Short positioning tells a more measured story. Short interest is 5.16% of the free float — meaningful, but down from a peak around 5.8% seen in early April. The trend over the past month has been a gentle drift lower, suggesting shorts have been trimming rather than pressing. The borrow market is very loose: availability is running at 568%, meaning there are roughly five-and-a-half shares available to borrow for every one already lent out. Cost to borrow is 0.43% annually — effectively zero friction. Shorts face no squeeze mechanics here. That's worth noting: the insider buying is not being amplified by a tight borrow environment.
Options traders have been cautious for weeks. The put/call ratio has been running above 1.40 since May 8, compared to a 20-day average around 1.27. At 1.41 it's elevated but not panicked — about half a standard deviation above normal. The 52-week high on the PCR is 2.16, so there's considerably more room to the downside in sentiment terms. The picture is one of persistent defensive hedging rather than acute fear.
The Street remains hesitant. Following the April 2 earnings print — where LW fell nearly 7% on the day — analysts trimmed targets in unison. BofA cut to $47, Barclays to $46, Wells Fargo to $46, BNP Paribas to $41, JPMorgan to $44. All maintained their existing ratings. Then today Stephens initiated coverage at Equal-Weight with a $46 target, adding a new cautious voice. The mean price target of $46.55 implies about 10.5% upside from current levels, but that's not a ringing endorsement from a group that has been cutting numbers consistently since late 2025. EV/EBITDA is running at 8.95x, down about 0.23x over the past month as the price drifted lower. The dividend score ranks in the 98th percentile, but the dividend history in the snapshot is dated to mid-2022, so current yield information should be treated with some caution.
The institutional register adds further texture. BlackRock added 5.6 million shares as recently as April 30 — a substantial increase — while Jana sits at 4.4% of shares outstanding and keeps buying. These are the two loudest voices pointing in the same direction. Against that, the ORTEX short score is a moderate 43, well below levels that signal a squeeze setup.
What to watch into the July 23 print is whether the insider buying clusters have established a floor around the $39-$41 zone, or whether the continued top-line pressure in the frozen potato segment — and any further softness in restaurant traffic data — proves the buyers too early.
See the live data behind this article on ORTEX.
Open LW on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
